Inside Outdoor Winter 2018

This is known as “The Endowment Effect.” The longer your own some- thing, the more it begins to feel like it is really yours. Secret #5: Empower your Sales Staff Studies have shown that even after researching online, compar- ing prices and reading reviews, 40 percent of customers remain open to persuasion once they enter a store. A well-trained, empowered sales force determines your level of sales. With- out them, your store cannot maximize its true upside potential. Take the Apple Store, which enjoys the highest sales per square foot in the history of the retail busi- ness. Employees are taught to solve customer problems, not sell goods. The logic behind The Container Store is that they would rather offer $40,000 a year to one super employee than pay $20,000 to two so-so employees. Last year, the average salary for this retailer was $44,000. That’s salary; they don’t pay commission. They put every new associate through 187 hours of training. They are obsessed with teaching employees how to sell and amaze customers. For the Con- tainer Store, at least, the secret to great retail is its ability to motivate its staff. It seems to be working, as the store rarely has sales or offer special deals. Every year the Ritz Carlton empow- ers every employee, from housekeeping up to executives, with up to $5,000 to comp guests. The only questions asked of the employee is what happened and to make sure it doesn’t happen again. Reward good behavior among employees and listen to them. In- troduce a suggestion box and have regular store meetings. Secret #6: Visual Merchandising There is an old retail adage that perfectly describes the need for visual merchandising: “Goods well displayed are half sold.” Think of the best ads you have seen on television or in store windows. The most effective ones are clean and simple and have a clear message. You might think of Duluth Trading Company as an example of these ideas. Be sure to pay attention to the first few feet when customers enter the store. This is referred to as the “de- compression zone.” This is the space where customers get the “vibe” or feel of a store. From this point, 90 percent of customers will turn right upon entry. Your best and newest items should be represented here. When it comes to in-store displays, remember the eye moves up toward the rear of the store. Avoid at all costs large displays in the front of the store that visually block the customers view of the entire store. Vary the height of display tables. Most stores I visit have four-way clothing displays, t-stands and waterfall displays that are set too high. Unless you run a big & tall opera- tion, be sensitive to the height of the average (woman) customer. Reduce clutter at all costs. Noth- ing shuts down senses and promotes shopper anxiety faster than a messy, unorganized shopping experience. This also applies to display windows. Avoid the temptation of trying to say too much at one time. Less is more. You don’t have to show everything you sell in the front window. Finally, don’t neglect the only public place where you can take off all of your clothes and try on someone else’s – the fitting rooms. Most have inadequate lighting, poor ventilation and mirrors resembling something you might find at a circus fun house. Secret #7: Manage your inventory Inventory is the very heart of the retail store. The best retailers know that in order to keep customers coming back and buying, they must have a constant flow of new merchandise. No one comes in your store to see what came in last year. They come in to see what’s new. I call this “The Power of New!” If two turns annually is the goal in a given classification, then a six months supply on average is what you will need to achieve it. If you want to turn 3X, you should have very little inventory older than four months in stock, 4X turn = 90 days and so on. The methodology by which retailers control their buying and hence man- age inventory is known as open-to-buy. This mathematical formula serves a multitude of essential services for the retailer. It provides for sales and inven- tory target goals; it provides guidance for how much to buy; it establishes benchmarks for evaluating progress; and it can be used at any level desired. Good sales and inventory forecast- ing too is essential to maximize suc- cess in a retail operation. A failure to plan oftentimes leads to a plan to fail. Secret #8: ControlYour Markdowns Today’s retailers know that rely- ing too heavily on deep discounts to move excess inventory not only hurts margins but can actually train the customer to wait for the sale. Hence, the way we frame a sale or price our goods is very important. “Save” makes customers see how much they saved versus how much they spent. Percent off (x%) sales are way over- done, irritating to the customer and dangerous for the retailer. % of respondents Source: Promocodes Provides full refund (i.e. returns are not limited to exchange or store credit) Does not require receipt No time limit for returns Does not require bringing original payment method Accepts returns without tags or original packaging Accepts returns for used items Free r turn shipping Option to return in-store 37.9% 33.6% 20.9% 12.1% 16.1% 10.8% 8.3% 9.3% 6.0% 6.2% 27.8% 11.0% In-Store Digitally Customer Service Training for Associates Source: BRP Consulting Formal training program for new hires On-demand micro-training/education On-demand training/education available via mobile devices Implemented and working well Implemented and needs improvement Plan to implement within 3 years 37% 55% 5% 29% 29% 23% 22% 24% 33% Likelihood of Usi g Digital Wall ts Over Next 90 Days Source: 451 Research 35% D ‘14 M ‘15 J ‘15 S ‘15 D ‘15 M ‘16 J ‘16 S ‘16 D ‘16 M ‘17 J ‘17 S ‘17 30% 24% 25% 22% 25% 25% 24% 24% 28% 29% 26% 25% 26% 25% 20% 15% Perc ntage of Respondents Who are Very/Somewhat Likely to Use Digital Wallets over Next 90 Days Inside Outdoor | Winter 2018 26